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Step-by-Step Guide: Setting Up a Successful Warehouse Automation Project

When potential clients ask me about the steps to take when considering automation, I understand their concerns. Automation is a significant investment, and when implemented correctly, it can propel a company to great success, as well as provide significant career growth for those leading the project. However, when it goes wrong, the consequences can be severe—for both the company and the careers involved.

So, what are the critical steps to take when considering automation?

“A critical factor in any project is ensuring you have the right people on the team.”
Greg Conner
President Warehouse Solutions – North America

1. Define the Problem You Want to Solve

Improvement is impossible without a clear understanding of the problem. While this may seem like common sense, many engagements start without this essential step being properly defined.

Leaders often attempt to summarize all the issues within their organization into one singular problem statement. However, no organization has only one problem, and no company ever resolves every issue—it’s the essence of continuous improvement.

I suggest starting with a list of key observations or critical impact factors. Examples include:

The more detail you provide, the better. The next step is to rank these factors by their impact on the organization.

2. Obtain Data

To quantify the potential improvements, you must first know where you stand. Typically, we evaluate several years of data, including inventory details, SKU profiles, and order velocity. For many companies, this can be a time-consuming process, often requiring IT or external consultants’ assistance.

3. Establish Business Growth Projections

Once the data is compiled, the next critical step is aligning on projected business growth. This step is foundational, as it defines the size and throughput of the automation system. You can consider this the cornerstone of the project—success stems from here, and failure can be traced back to misalignment at this stage.

Many companies evaluate multiple growth scenarios to assess potential impacts. The most successful projects I’ve been part of involved gaining alignment from senior leadership on these projections early in the process.

4. Select Your Team

A critical factor in any project is ensuring you have the right people on the team. While team composition varies depending on the company and project, I recommend having the following key roles represented:

  • Executive sponsor
  • Operations
  • IT
  • Engineering / Continuous Improvement
  • Facilities (and potentially your architectural engineering firm, if selected)
  • Health and Safety
  • Legal
  • Human Resources

5. Engage with Automation Partners

Engaging with automation partners can start at any point, but the most logical time is after defining your problems, assembling the necessary data, and establishing your growth projections. At this stage, you’re truly ready to move forward.

There’s no magic formula for selecting an automation partner, but my advice is to talk with several. While I’d love to recommend Vanderlande, this blog must remain objective! In all seriousness, choosing an automation partner is a significant decision that shouldn’t be taken lightly. This partner will be with you for years, both during the project and throughout the life of the system, making it akin to a long-term relationship.

My suggestion is to establish a comprehensive selection process and take your time. A typical process involves preparing a Request for Information (RFI) document, which is sent to a shortlist of potential automation providers. In the RFI, briefly describe your project and desired outcomes, and ask the potential partners to indicate their intent to bid and provide key information. Common items requested include:

Before sharing any further project details, ask each company to sign a mutual Non-Disclosure Agreement (NDA).

6. Select an Automation Partner

Once the RFI responses are in, you’ll typically release a Request for Proposal (RFP) to the automation partners who’ve expressed interest. The RFP should be non-prescriptive, allowing partners to use their expertise to propose solutions that best address your needs.

The best selection processes I’ve participated in included these key elements:

7. Formal Selection of Automation Partner

At this stage, formally select the automation partner and set the next steps in motion. The most effective method is to inform the selected partner of your decision and enter into a contract to finalize the system design and pricing.

8. Engineering Project

The engineering phase typically lasts 3 to 9 months. During this time, you’ll collaborate closely with your automation partner to refine the design, often incorporating feedback from the selection process. This stage culminates in a firm proposal and draft contract, and your legal team will work to finalize the contract language.

9. Contract Signing and Project Handover

Once the contract is signed, the project enters the execution phase. Ensure key project members remain involved throughout this phase to maintain continuity and a smooth transition.

While other processes may also lead to success, the steps outlined above have consistently proven effective in my experience. As always, our team at Vanderlande is available to assist and answer any questions to help ensure the success of your automation journey.

Like to know more?

Every company and every market is different. This is reflected in the layout of your warehouse – and the advice offered by our experts.